Économie et Statistique n° 401 - 2007
Cohabitees and income tax in France - To marry or not to marry: can tax law be a deciding
factor? - Family components of income tax in Germany and in France: pertinent differences

To marry or not to marry: can tax law be a deciding factor?

Élise Amar et Sophie Guérin

In France, the income tax system for married couples relies on a joint income statement
made to the tax administration (similar to an income self assessment form), which
is commonly known for allowing tax savings to married couples on the basis of a progressive
tax band system. In reality, a range of tax allowances for low income households are
added to this joint statement system and modify its effects. Indeed, a deeper analysis
of the French income tax system reveals that for some couples' income profiles, it
might even be more advantageous to stay unmarried.
However, the relevance of this study depends on how significant the number of people
in each situation is, whether their tax burden is positively or negatively impacted
when being married. The number of households within each category shows the bias caused
by the joint declaration system for married and unmarried couples: in 2004, although
the majority of couples were better off when married, dual-income couples with average
incomes found themselves mainly penalised by marriage since they could only benefit
once from some of the low income tax allowances. On the other hand, single-income
couples represent a large number of those who gain from being married since they benefit
most from the joint income statement system.
Finally, it is possible to measure the real costs and benefits when moving from an
unmarried to a married status and vice versa, using real data: benefactors from separate
taxation represent nearly one in four couples while nearly 30% of couples with one
or two children benefit from being unmarried. Those who benefit from being married
are mainly single-income couples. Couples with the highest incomes have the most to
gain from being married.